Saturday, 14 September 2013

There's a view which says that you can get house prices down by building more, which has a lot of superficial appeal, but the closer you look at actual hard facts and figures, the less plausible this seems.

Or look at large towns and cities, where land values are the highest - they are not high despite all the new housing (and shops, offices and factories) but because of them.

So the figure for 2000 comes out lower using these figures, but the trend is clear.

What has happened since then?Census - UK population
2001 - 59.1 million
2011 - 63.2 million

New dwellings completed from DCLG Table 211 in the years 2000 to 2012 inclusive was 2.3 million (minus an unknown number of dwellings demolished?). Let's also assume UK population is now 64 million.

So if we add all those together.2000/01 - dwellings 22.5 million, population 59.1 million
= 380 dwellings per 1000 inhabitants.
20012/13 - dwellings 24.8 million, population 64 million
= 387 dwellings per 1000 inhabitants.

So not much change really.

So although building more stuff where it is needed (i.e. where rental values are highest) is almost certainly good for the economy in one way or another, we can rule this out as a primary influence on house prices.

S, this has nothing to do with "the hallowed green belt" or "food security", I'm just saying on closer inspection, the total number of houses doesn't make much difference to house prices or rents (how those houses are allocated is ten times as important).